SoundExchange puts a stop on its royalty hike and decides to hash a new plan with webcasters

Several days ago, DailyTech reported the online radio industry was about to meet its end when the D.C. Circuit Court of Appeals declined to put a stop on a new royalty scheme. Championed by SoundExchange, the new royalty scheme increases money flow for artists and labels.

Despite the court decision to go ahead with the new scheme, SoundExchange announced the new royalty scheme will be postponed, without any indication it will be continued. According to SoundExchange Executive Director Jon Simson, the group is in debate with online radio stations on an alternative plan, one that will allow them to continue their operation while compensating artists and labels.

Pandora, one of the four largest online radio companies was one of many stations that took a stance against SoundExchange. Pandora founder Tim Westergren said users who called into Congress to voice against the changes all helped.

"This is a direct result of lobbying pressure, so if anyone thinks their call didn't matter, it did. That's why this is happening," said Westergren in a blog on Listening Post.

SoundExchange said it will now work closely with webcasters, large and small to form a new plan.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)